US Bank 2011 Annual Report Download - page 55

reflecting organic growth in core deposits and acquired
balances. Refer to Table 14 and “Balance Sheet Analysis” for
further information on deposit trends.
Additional funding is provided by long-term debt and
short-term borrowings. Long-term debt was $32.0 billion at
December 31, 2011, and is an important funding source
because of its multi-year lending structure. Refer to Note 13
of the Notes to Consolidated Financial Statements for
information on the terms and maturities of the Company’s
long-term debt issuances and “Balance Sheet Analysis” for
discussion on long-term debt trends. Short-term borrowings
were $30.5 billion at December 31, 2011, and supplement the
Company’s other funding sources. Refer to Note 12 of the
Notes to Consolidated Financial Statements and “Balance
Sheet Analysis” for information on the terms and trends of the
Company’s short-term borrowings.
The Company’s ability to raise negotiated funding at
competitive prices is influenced by rating agencies’ views of
the Company’s credit quality, liquidity, capital and earnings.
Table 20 details the rating agencies’ most recent assessments.
In addition to assessing liquidity risk on a consolidated
basis, the Company monitors the parent company’s liquidity.
The parent company’s routine funding requirements consist
primarily of operating expenses, dividends paid to
shareholders, debt service, repurchases of common stock and
funds used for acquisitions. The parent company obtains
funding to meet its obligations from dividends collected from
its subsidiaries and the issuance of debt securities. The
Company maintains sufficient funding to meet expected
parent company obligations, without access to the wholesale
funding markets or dividends from subsidiaries, for
12 months when forecasted payments of common stock
dividends are included and 24 months assuming dividends
were reduced to zero. The parent company currently has
available funds considerably greater than the amounts
required to satisfy these conditions.
Under United States Securities and Exchange Commission
rules, the parent company is classified as a “well-known
seasoned issuer,” which allows it to file a registration
statement that does not have a limit on issuance capacity.
“Well-known seasoned issuers” generally include those
companies with outstanding common securities with a market
value of at least $700 million held by non-affiliated parties or
those companies that have issued at least $1 billion in
aggregate principal amount of non-convertible securities,
other than common equity, in the last three years. However,
the parent company’s ability to issue debt and other securities
under a registration statement filed with the United States
Securities and Exchange Commission under these rules is
limited by the debt issuance authority granted by the
Company’s Board of Directors and/or the ALCO policy.
At December 31, 2011, parent company long-term debt
outstanding was $14.6 billion, compared with $13.0 billion at
December 31, 2010. The $1.6 billion increase was primarily
due to $2.3 billion of medium-term note issuances, partially
offset by $.6 billion of junior subordinated debenture
extinguishments. At December 31, 2011, there was $2.7
billion of parent company debt scheduled to mature in 2012.
Future debt maturities may be met through medium-term note
and capital security issuances and dividends from subsidiaries,
as well as from parent company cash and cash equivalents.
Federal banking laws regulate the amount of dividends
that may be paid by banking subsidiaries without prior
approval. The amount of dividends available to the parent
company from its banking subsidiaries after meeting the
regulatory capital requirements for well-capitalized banks was
approximately $6.6 billion at December 31, 2011. For further
information, see Note 23 of the Notes to Consolidated
Financial Statements.
TABLE 21 Contractual Obligations
Payments Due By Period
At December 31, 2011 (Dollars in Millions)
One Year
or Less
Over One
Through
Three Years
Over Three
Through
Five Years
Over Five
Years Total
Contractual Obligations (a)
Long-term debt (b) ................................................. $ 7,046 $ 7,496 $ 7,057 $10,354 $31,953
Operating leases ................................................... 222 374 248 443 1,287
Purchase obligations ............................................... 236 294 74 15 619
Benefit obligations (c) .............................................. 38 79 81 202 400
Time deposits ...................................................... 28,688 9,061 4,664 88 42,501
Contractual interest payments (d) .................................. 5,136 1,848 1,033 8,004 16,021
Total ............................................................. $41,366 $19,152 $13,157 $19,106 $92,781
(a) Unrecognized tax positions of $479 million at December 31, 2011, are excluded as the Company cannot make a reasonably reliable estimate of the period of cash settlement with the
respective taxing authority.
(b) Includes obligations under capital leases.
(c) Amounts only include obligations related to the unfunded non-qualified pension plans and post-retirement medical plan.
(d) Includes accrued interest and future contractual interest obligations.
U.S. BANCORP 53